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Cato Corp (NYSE:CATO)
Intrinsic Value (FCF Projected)
$32.87 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Cato Corp's FCF projected intrinsic value is $32.87. The stock price of Cato Corp is $36.95. Therefore, Cato Corp's Price to Intrinsic Value (FCF Projected) Ratio of today is 1.1.

CATO' s 10-Year Price to Intrinsic Value (FCF Projected) Range
Min: 0.59   Max: 1.37
Current: 1.1

0.59
1.37

During the past 13 years, the highest Price to Intrinsic Value (FCF Projected) Ratio of Cato Corp was 1.37. The lowest was 0.59. And the median was 0.90.

CATO's Price to Intrinsic Value (FCF Projected) is ranked lower than
164% of the 641 Companies
in the Global Apparel Stores industry.

( Industry Median: 1.40 vs. CATO: 1.10 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Cato Corp's FCF(6 year avg) is calculate as

Cato Corp Quarterly Data

201301201304201307201310201401201404201407201410201501201504
total_freecashflow -1.342.121.6-11.89.547.622.0-1.120.125.2
201007201010201101201104201107201110201201201204201207201210
total_freecashflow 21.6-4.913.838.613.1-10.34.148.62.0-14.2
200907200910201001201004
total_freecashflow 21.33.923.029.4

Add all the Free Cash Flow together and divide 6 will get Cato Corp's FCF(6 year avg) = $60.66.

Cato Corp's FCF Projected Intrinsic Value for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Apr15)*0.8)/Shares Outstanding
=(9.52035159596*60.6573333333+402.988*0.8)/27.375
=32.87

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Cato Corp's Price to FCF Projected Intrinsic Value Ratio for today is calculated as

Price to FCF Projected Intrinsic Value=Share Price/FCF Projected Intrinsic Value
=36.95/32.8719466742
=1.12

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value (DE), Intrinsic Value (DCF), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Cato Corp Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
iv_dcf_share 19.3021.5521.6022.5124.9526.3128.6629.8229.0232.27

Cato Corp Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
iv_dcf_share 29.8233.7034.9530.1429.0231.9133.5831.8632.2732.87
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